Determine the gross debt service ratio


Response to the following problem:

Jane Doe earns $30,000 per year and has applied for an $80,000, 30-year mortgage at 8 percent interest, paid monthly. Property taxes on the house are expected to be $1,200 per year.

If her bank requires a gross debt service ratio of no more than 30 percent, will Jane be able to obtain the mortgage?

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Financial Accounting: Determine the gross debt service ratio
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